refining sector fitness check step 1 - concawe

Proprietary and Confidential© 2015 HSB Solomon Associates LLC

www.SolomonOnline.com

1

Refining Sector Fitness CheckStep 1

Tracy Ellerington

24 February 2015



2

Solomon Databasesfor Benchmarking

We show clients where their operations stand against the spectrum of global competition.

Solomon verifies input to its databases, ensuring consistency during each study.

Our data are proprietary, not pulled from inconsistent, publicly available sources.

of European refinery companies participated in the studies regularly within the Fitness Check time period. 99%



3

EU Fitness CheckStep 1 Data

Only data provided by the refineries to Solomon are included in the Fuels Studies.

Solomon does not adjust the raw data, which are supplied and owned by the refineries themselves.



4

Peer Groups

EU-28

EU-15 and EU-13

Nine Geographical Regions• Baltic (BAL) – Denmark, Finland, Sweden, Lithuania

• Benelux (BNX) – Belgium, Netherlands

• Germany (GER)

• Central Europe (CEU) – Austria, Czech Republic, Hungary, Poland, Slovakia

• UK & Ireland (UKI)

• France (FRA)

• Iberia (IBE) – Spain, Portugal

• Mediterranean – Italy, Greece

• South East Europe (SEE) – Bulgaria, Romania, Croatia

Five Complexity Groups

Petrochemical Integrated Sites



5

Five Complexity Groups

Complexity Factor defined as

Hydroskimming + Thermal Units 1. Visbreaker and Thermal Cracker

Gasoil Conversion (GOC) Split by Complexity Factor2. GOC A Complexity Factor <6.93. GOC B 6.9 ≤ Complexity Factor <8.04. GOC C 8.0 ≤ Complexity Factor <9.55. GOC D 9.5 ≤ Complexity Factor

(bbl/d)Capacity Crude Total

(bbl/d) EDC Process

Factor EDC Capacity Unit EDC Process

GOC groups were set to have an equal split in 2006;ensure that in 2012 and 1998, no group was <5 refineries



6

Refinery ComplexityStudy Operating Years 1998–2012

Refineries have become more complex, installing deep desulphurisation, hydrocrackers, cokers, etc.

16 14 14 15 17 15 12 9

2622 25 22 17

139

8

1718 12 14 16

1618

13

1110 14

20 1920

18

17

811 14

14 1820

22

28

0

10

20

30

40

50

60

70

80

90

100

1998 2000 2002 2004 2006 2008 2010 2012

Num

ber

of

Refineries

Hydroskimmer GOC A GOC B GOC C GOC D



7

Solomon Insights to Industry Trends (EU-28)



8

Refineries Have Invested in ComplexityComplexity Factor for Study Operating Years 1998–2012

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

1998 2000 2002 2004 2006 2008 2010 2012

Com

ple

xity F

act

or

Overall crude sulfur (S) fairly constant, decline in early 2000s allowed refineries to put off investment in new units for Euro III

EU-15

EU-28

EU-13



9

Meeting Gasoline Sulphur SpecificationsStudy Operating Years 1998–2012 (EU-28)

0

5

10

15

20

25

1998 2000 2002 2004 2006 2008 2010 2012

Capaci

ty a

s a %

of

Inst

alled

Cru

de C

apaci

ty

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

VGO and Resid HDT – Mainly FCC Feed Pretreatment

Other Gasoline –Mainly for FCC Gasoline

Main source of sulphur in gasoline was from FCC gasoline



10

20

25

30

35

1998 2000 2002 2004 2006 2008 2010 2012

Capaci

ty a

s a %

of

Inst

alled

Cru

de C

apaci

ty

0

1

2

3

4

5

6

7

8

9

10

Distillate Sulphur SpecificationsStudy Operating Years 1998–2012 (EU-28)

Diesel (Overall)

Kerosene

To meet Euro IV and Euro V specifications



11

Diesel DesulphurisationStudy Operating Years 1998–2012

<20 ppm is Solomon global benchmark to cover global specifications; in European units, produce <10 ppm S diesel

Conventional >350 ppm 20–350 ppm <20 ppm

11 9 86 5 5 4 3

1516

14

12

84

32

21

610

1821 26 29

0

5

10

15

20

25

30

35

40

1998 2000 2002 2004 2006 2008 2010 2012

Capaci

ty a

s a %

of

Inst

alled

Cru

de C

apaci

ty



12

Capacity of Hydrogen Plant IncreasesStudy Operating Years 1998–2012 (EU-28)

0

1

2

3

4

5

6

7

1998 2000 2002 2004 2006 2008 2010 2012

Capaci

ty a

s a %

of

Inst

alled

Cru

de C

apaci

ty

0.5

0.6

0.7

0.8

0.9

1.0

1.1

H₂ Production and Purification

Sulphur

Additional H₂ required for all HCR and additional HDT units, and more sulphur product as a result



13

Crudes ProcessedStudy Operating Years 1998–2012 (EU-28)

0

1000

2000

3000

4000

5000

6000

7000

8000

1998 2000 2002 2004 2006 2008 2010 2012

Cru

de P

roce

ssed, k t

/yr

per

Refinery

N.B. Asian crudes too small to show on scale

Middle East North Africa RussiaWest Africa

Rest of Europe Mexico and Venezuela

North Sea Other Americas

Other FSU



14

Other InputsStudy Operating Years 1998–2012 (EU-28)

0

50,000

100,000

150,000

200,000

250,000

300,000

1998 2000 2002 2004 2006 2008 2010 2012

Oth

er

Inputs

, t/

yr

0

2,000

4,000

6,000

8,000

10,000

12,000

VGO

Other Feedstocks

Natural Gas



15

Products in t/yr processed divided into following

Liquefied petroleum gas (LPG) (includes purer propane and butane products)

Propylene (refinery, chemical, polymer grades)

Gasoline (unleaded, leaded, aviation)

Jet fuels

Kerosene (excluding jet fuels)

Distillates• Diesel transportation fuel• Light heating or gas oil• Marine diesel

Marine bunker fuels• Non-cracked blends only• All other blends

Residual fuel• Five categories by wt % S• Extremely viscous

Miscellaneous products

Products



16

Products, GasolineStudy Operating Years 1998–2012 (EU-28)

N.B. Not zero on x-axis

1,200,000

1,300,000

1,400,000

1,500,000

1,600,000

1,700,000

1,800,000

1998 2000 2002 2004 2006 2008 2010 2012

Pro

duct

, t/

yr

Unleaded Gasoline Leaded Gasoline



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Products, DistillatesStudy Operating Years 1998–2012 (EU-28)

1,200,000

1,700,000

2,200,000

2,700,000

3,200,000

3,700,000

1998 2000 2002 2004 2006 2008 2010 2012

Pro

duct

, t/

yr

Transportation Fuels Heating Gas Oil Marine Diesel

N.B. Not zero on x-axis



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Normalised Personnel HoursEmployees + Contractors for Study Operating Years 1998–2012

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

0.11

1998 2000 2002 2004 2006 2008 2010 2012

Work

Hours

per

Barr

el of

Cru

de P

roce

ssed

EU-13 companies are reducing numbers from very high levels. Benefit from low-wage costs relative to EU-15.

EU-15

EU-28

EU-13



19

Capital InvestmentThousand Euros per Year (k EUR/yr)

Provided data for study year, prior year, 2 years prior, and 3 years prior

To smooth out any missing data where refineries did not participate in a study

Categories of investment as follows

Non-regulatory (profit improvement) investment

• New units or constraint removal

Regulatory investment

• Emissions and effluent

• New or modified process units for clean fuels

– Gasoline, diesel, or other

• Safety

Energy

Other non-process



20

Capital Investment per RefineryAll Operating Years 1998–2012 (EU-28)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Capital Spend, k E

UR/y

r

New Process Units Process Constraint Removal

Other (Non-Process) All RegulatoryEnergy Conservation



21

Regulatory Spending BreakdownAll Operating Years 1998–2012 (EU-28)

0

5,000

10,000

15,000

20,000

25,000

30,000

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Capital Spend, k E

UR/y

r

Other Fuel Specs Safety and Other

Emissions and Effluent Gasoline Specs Diesel Specs

* Data on Fuels specs and Safety Spend not collected prior to 2002



22

EUR

6%

4%

58%

17%

15%

Refinery OpEx Components - 2012

Energy Maintenance Non-MaintenancePersonnel

Taxes, Insurance,& Other Fixed

Other VolumeRelated

NSA

9%

7%

34%

30%20%

PAC

6%

3%69%

11%

11%



23

Variable Operating ExpensesStudy Operating Years 1998–2012 (EU-28)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1998 2000 2002 2004 2006 2008 2010 2012

Opera

ting C

ost

s, k

EU

R/y

r

Own Produced Energy

Other Variable Costs

Purchased Energy



24

Peer Group Energy Efficiency IndexStudy Operating Years 1998–2012

90

100

110

120

130

140

150

1998 2000 2002 2004 2006 2008 2010 2012

Energ

y E

ffic

iency

Index

Petrochemical Sites

EU-13

EU-28

Average EII calculation per refinery indexed relative to EU-28 = 100 in year 2000

EU-15



25

Refinery Energy ConsumedStudy Operating Years 1998–2012 (EU-28)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

1998 2000 2002 2004 2006 2008 2010 2012

Energ

y C

onsu

med, G

J/yr

Solid Fuels Purchased Steam (Heat)

Purchased Electricity Gaseous Fuels Liquid Fuels



26

Fuels Refinery Emissions

Reported and calculated CO2 emissions provided

Calculated equivalent CO2 emissions from

• Energy related CO2 emissions

• Non-energy CO2 emissions

• Carbon equivalent of other emissions

Actual CO2 were reported only in 2002 and 2004

NOX and SOX data provided since 2004 study



27

Biofuels for BlendingStudy Operating Years 1998–2012 (EU-28)

N.B. ethanol is often blended outside the refinery boundary.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1998 2000 2002 2004 2006 2008 2010 2012

Bio

fuels

Purc

hase

d f

or

Ble

ndin

g

t/yr

Bioethanol Bio ETBE Biodiesel



28

around the world.

Improving

Competitive Performance



29



46

Fixed Operating ExpensesStudy Operating Years 1998–2012 (EU-28)

0

10,000

20,000

30,000

40,000

50,000

60,000

1998 2000 2002 2004 2006 2008 2010 2012

Opera

ting C

ost

s, k

EU

R/y

r

T/A Costs

Other Fixed Costs

Employee Compensation



47

Refinery Power GenerationStudy Operating Years 1998–2012 (EU-28)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1998 2000 2002 2004 2006 2008 2010 2012

Pow

er

Genera

tion, M

Wh/y

r

(per

refinery

)

High Efficiency Power Generation (includes cogeneration)

Total On-Site Power Generation

Fired Cogeneration Power Production (where steam is co-produced)

refining sector fitness check step 1 - concawe

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